P27 pushes its own instant payment solution for the Nordic countries

Driven by the alignment of Nordic central banks around TIPS and the growth of instant payments, the P27 organisation is unveiling a harmonised payment platform for countries in the region that will enable them to manage domestic and international payments in real time.

FACTS

• Project 27 (known as P27) aims to establish a single pan-Nordic payment infrastructure for the 27 million inhabitants of the region.

• The platform will allow payments to flow instantly between people and businesses in the countries of Denmark, Finland and Sweden.

• Norway is not part of the current scope, but the banking community is showing increasing interest in joining P27.

• More than a dozen banks connected to the Swedish instant payment solution Swish, including Danske Bank, Handelsbanken, Nordea, OP Financial Group, SEB and Swedbank, are ready to test the Nordic payment platform by the end of the year.

• The new payment platform will allow a MobilePay app user in Denmark to transfer money to a Swish payment app user in Sweden.

CHALLENGES

• Standardisation and harmonisation of payments in the Nordic countries: P27 is built on the ISO20022 format with the Nordic Payments Council (NPC) managing the Nordic payment systems. Open access and a common infrastructure will enable further harmonisation of the European payment landscape. P27 aims to replace a currently fragmented clearing landscape with a new infrastructure that provides simplicity and efficiency of scale, harmonisation and standardisation of payments, instantaneous capabilities, modular functionality, increased transparency and a resilient design capable of implementing robust security measures.

• In a white paper published in June, P27 highlights the growing importance of instant payments and the need to ensure systemic resilience in the future. This article aims to explain how P27 sees its role and the role of other players in the payments ecosystem in the future.

• Building a common infrastructure: The Nordic Payment Platform marks a new chapter in the so-called 'mutual interest' collaboration between the six rival financial groups. Deepening cross-border cooperation has gained critical traction in the face of increased competition in the digital payments sector from a growing number of fintechs and niche online banks.

MARKET PERSPECTIVE

• Last month Danske Bank launched its Turn to New Tech initiative, which encompasses greater use of application programming interfaces (APIs), cloud technology and better use of data in all key areas of the bank's business units.

• Sveriges Riksbank, the Swedish central bank, successfully completed the first phase of its migration to the Instant Payment Settlement System (TIPS), which paved the way for instant settlement of payments from EU countries to Sweden and vice versa, thus integrating the Swedish krona into the European mechanism.